637.303 Apportionment when income interest ends. 1. For purposes of this section, 'undistributed income' means net income received before the date on which an income interest ends. The term does not include an item of income orexpense that is due or accrued or net income that has been added or is required to be addedto principal pursuant to the terms of the trust. 2. When a mandatory income interest ends, the trustee shall pay to a mandatory income beneficiary who survives that date, or the estate of a deceased mandatory income beneficiarywhose death causes the interest to end, the beneficiary’s share of the undistributed incomethat is not disposed of pursuant to the terms of the trust unless the beneficiary has anunqualified power to revoke more than five percent of the trust immediately before theincome interest ends. In the latter case, the undistributed income from the portion of thetrust that may be revoked must be added to principal. 3. When a trustee’s obligation to pay a fixed annuity or a fixed fraction of the value of the trust’s assets ends, the trustee shall prorate the final payment if and to the extent requiredby applicable law to accomplish a purpose of the trust or annuity or a fixed fraction of the value of the trust’s assets ends, the trustee shall prorate the final payment if and to the extent requiredby applicable law to accomplish a purpose of the trust or its settlor relating to income, gift,estate, or other tax requirements. 99 Acts, ch 124, §8 Sat Dec 23 12:19:06 2023 Iowa Code 2024, Section 637.303 (16, 0)
Iowa Legal Code